Examining Personal Financial Sophistication and Societal Impact

This research examines how the financial sophistication of making or receiving digital payment transactions - driven by financial technology (fintech) - relates to societal impact, measured using the United Nations Human Development Index (UN HDI) across 193 countries. HDI reflects societal well-being through health, education, and standard of living. Independent variables include digital payment behaviors, demographics, and workforce participation. In a multiple regression model, making digital payments negatively predicts societal impact, while receiving payments shows a positive association when isolated. Receiving or making payments together is not significant. Male gender correlates with lower societal impact; age and wealth are not significant predictors. Workforce participation is a strong positive factor. The findings extend the literature by showing: (1) digital payment transactions can serve as indicators of financial sophistication, and (2) directional differences in societal impact exist between making and receiving payments, with receiving payments more positively aligned with societal development outcomes.